CENTRICA has slashed the valuation of its UK-focused exploration and production business by around £400 million following the plunge in oil and gas prices triggered by the coronavirus, writes Mark Williamson.
The Scottish Gas owner recorded a £381m impairment charge in respect of the E&P business, which has assets in the North Sea and Morecambe Bay.
The impairment highlights the challenges posed for North Sea businesses by the plunge in commodity prices this year.
READ MORE: Can green energy revolution create enough jobs to make up for Scottish oil decline?
The operating profits achieved by Centrica’s Spirit Energy oil and gas business fell by around 67% in the first half, to £33m, from £90m last time. Spirit is focused on the North Sea.
Centrica put its 69% stake in Spirit up for sale last year but paused the process in April. The company said yesterday the divestment process will restart once commodity and financial markets have settled.
READ MORE: £250m takeover provides vote of confidence for North Sea amid coronavirus crisis
Centrica wants to focus on the supply of energy to households and consumers in the UK and Ireland.
The company announced yesterday that it has agreed to sell its US supply business for $3.6bn (£2.9bn), to NRG Energy.
Group customer numbers fell 102,000 or 0.8% in the six months to June 30, to 12.9m. Pre-tax losses fell to £264m, from £569m.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here